Empowering SMBs With Openness

New technologies are rapidly changing the way small and mid-size merchants approach the point of sale, but are more options always a good thing? Matt Taylor, Group President of Integrated Payments and Emerging Channels at Vantiv, sat down with PYMNTS to discuss what an open ecosystem really means and if small merchants are equipped to handle an abundance of innovation.

As merchants are driven to make more complex decisions surrounding their point-of-sale (POS) environment and payments processes, the ability to have access to a wider variety of choices and options for the technology that can support innovation and growth is important.

Enter the open ecosystem.

Taylor noted that merchants, especially small and mid-size companies, need and want a variety of choices and features in their POS system. Not only is there an increasing demand in the market, but Taylor said that POS software developers are looking to meet this demand by bringing an abundance of these specialized POS and payments features to the merchants that need them the most.

In this “incredibly abundant era of innovation,” small business owners are being presented with more options and choice for technologies at the POS than ever before, Taylor explained.

However, with so many technologies and solutions to choose from, SMBs may be left too overwhelmed to actually make a selection.

To help keep the abundance of options from turning into analysis paralysis – where too many choices results in no choice at all – Vantiv pairs a business with several prospective solutions based on their vertical, size, complexity and geography.

“From there, two to three options are generated and that allows for competition as each technology partner can position their software, value-added services, support and service to best win the deal,” Taylor explained. “With two to three options it usually becomes apparent to the merchant which one best fits their needs.”

The role of the open ecosystem is to enable the ecosystem that’s working out there today to help small business owners install and maintain their technologies, while also supporting an environment where any type of feature or POS software developer that wants to connect to payments can easily offer their solution to merchants.

An increasing number of POS software developers have entered the ecosystem in order to provide merchants with POS solutions that offer differentiated experiences, which puts the power of choice in the hands of merchants.

“The natural state of the market is that merchants do want choice. By having an open platform, we don’t think that choosing a payments processor needs to dictate what kind of POS software solution [merchants] want to have,” Taylor said. “Being open means we want to give them access to the entire market as much as possible in terms of features and options versus choosing a product we think is the right solution for them.”

Reduced friction in distribution and the creation of software has helped to spur the openness of technologies within the POS environment, but Taylor also said other major shifts in the market have attributed to more innovation and choice for merchants.

The shift in form factor to tablets has been particularly important.

Taylor said the use of tablets at the POS has “opened up and continues to open up an entirely new class of software developer that thinks about user experience in a different way than the era pre-tablet.”

Thinking about the user experience differently, along with a stronger focus on user design, has also become a more mainstream thought among merchants. Taylor also pointed out that as merchant have become more accustomed to using and interacting with POS technologies, they have also opened up to exploring newer advancements in features, processes, designs and processes as they become available.

Use cases for omnichannel have also been a significant driver to technological advancement in the POS environment.

“Merchants are thinking about engaging their consumers beyond the moment when they’re buying at the cashier or register or the counter,” Taylor explained. “They are thinking about engaging them on their mobile device and in their online presence – and therefore all kinds of things around what kinds of features and new innovations they should be using are coming into focus for them.”

Security, which Taylor called the “number one goal for merchants today,” is an ongoing and critical component to the POS technology environment for merchants.

While security remains top of mind and holds a strong influence over many of the decisions merchants make when it comes to the POS, Vantiv’s approach of openness aims to support incremental upgrades to help ensure POS systems are supporting the latest security requirements and can easily adapt as those requirements continue to advance.

“It will take years, not quarters, for a seamless end-to-end multi-channel, i.e. fully integrated mobile, online and in-store, payment and purchase experience to occur. To where it becomes just second nature for us as consumers to expect that and to adopt that from an everyday purchase perspective, but it’s happening and we have more and more of our merchants looking to us for help,” Taylor said.

Taylor admits that 2015 was a very strong year for new technologies in the POS environment — and going forward the goal is to continue building a network with scale, flexibility and incremental growth via the open ecosystem.